Carlsbad, Calif. Sunrise Medical has named Michael Hammes as its new chief executive officer and president. A Sunrise board member since 1998, Hammes replaced interim chairman and CEO Murray Hutchison, who will continue as chairman of the board.

"Frankly, I'm excited about [working for Sunrise]," said Hammes. "As a company, Sunrise has sufficient size and scope on a worldwide basis to really be meaningful."

It also has some challenges. Sunrise reported net earnings of $1.1 million, or 5 cents a share, for the second quarter of fiscal 2000, ended Dec. 31, compared with earnings of $1.8 million, or 8 cents a share, during the same period the previous year. For the six-month period, the company recorded earnings of $2.6 million, or 12 cents a share, compared with earnings of $5.4 million, or 24 cents a share, a year ago.

The second-quarter results were lower than Wall Street's expectations. Analysts had estimated the company's earnings at 9 cents a share.

"It was a disappointing quarter," Hammes acknowledged. "If you look at the income statement, the gross margin was not what we had forecast-and that's what not only disappointed the Street but also disappointed us."

The new CEO was forthright in explaining the possible causes of the company's financial downturn. "As we look into the depths of [Sunrise's financial problems], it was kind of our own doing," he said. "It was not external events driving that gross margin down, and it wasn't industry margins driving it down. We simply were not executing our plan the way we needed to execute it, both at the plant level and in the warehouse."

Hammes already has some clear ideas about what changes need to be made at Sunrise. "I think I would be foolish to say there won't be any [changes]. Some cost structures here simply are not competitive, and in terms of a first step, they need to get more competitive," he said. "Another issue is that we need to get to the marketplace faster with new products. And my own experience tells me that you do that with a leaner organization and not a fatter one."

Hammes is still optimistic about the company's future. "My basic goals for Sunrise are to build upon theproducts, customer relationships and people strengths that we have and to get Sunrise back to where it belongs from a growth and profitability point of view."